The annual forecast “Investment Playbook 2023” predicts the most painful recession in history. However, it must not be forgotten that the big investors often declare their own interests to be reality.
When the big investors release their annual forecasts, caution is advised. Desires are often declared as reality. Some worry is actually a hope. The big players on the world stock exchanges have expertise – but they also have interests.
They prefer to put their skills at the service of their interests, which is their business model, so to speak. This means: There are no innocent predictions from their houses. Which brings us to BlackRock, the largest capital collector in the world.
The company, which holds assets of around 10 trillion dollars and is also involved in all DAX companies, is attracting attention these days with a highly negative outlook for the global economy and the stock market year 2023.
The annual forecast, the so-called “Investment Playbook 2023”, states: BlackRock expects the “most painful recession in history”. The asset manager predicts a “new regime of increased unpredictability” on the global capital markets.
Here are the shock forecasts in detail:
This shock forecast has one disadvantage: it is guided by interests and therefore not serious. The statements are in clear contradiction to the forecasts of almost all economic research institutes – and to the reality of the companies.
Here are six facts BlackRock strategists don’t see because they don’t seem to want to see them:
The Ifo Institute, the OECD and the IMF expect that the expected winter recession will be milder than previously assumed. The current forecast by the Institute for the World Economy (IfW) assumes that global economic output will grow by as much as 0.3 percent in 2023. Important to know: Unlike the asset managers, the economic research institutes have no advantages from a negative or positive forecast.
The mood on the executive floor is significantly better than BlackRock indicated. The Ifo business climate index jumped in December. None of the companies expect a deep recession. According to a survey by KPMG, almost 58 percent of the approximately 1,300 CEOs surveyed around the world expect the recession to be mild and short.
The fundamentals of the corporations reflect these assessments. Many companies use inflation to make powerful price increases and thus increase profits. Take Volkswagen AG as an example: The car company was not only able to increase its sales, but also achieved an operating result of 4.3 billion euros in the third quarter – up 63 percent on the previous year.
Take Bayer AG as an example: The pharmaceutical group reported sales that were almost 16 percent higher in the 3rd quarter compared to the previous year. Profits were also increased more than sixfold to 546 million euros.
Example Deutsche Bank: The number 1 money house benefits from lower administration costs and rising interest rates. Profit rose in the 3rd quarter compared to the same period last year by 475 percent to 1.1 billion euros.
Example LVMH: The French luxury group was able to pass on the higher prices to its customers and posted a profit increase of 34 percent.
Same picture in the US. The stock market reacted immediately to the pleasing fundamental data. The S
The inflation front is also sending signals of the all-clear – at least in large parts of the economy. According to the latest data from the Federal Statistical Office, producer prices fell by 3.9 percent.
It is true that the central banks cannot simply take their foot off the gas when it comes to their rate hike policy. But governments do have more leeway to increase debt, thereby easing the pain in the economy.
The European energy price brake, financed on credit, and the American Inflation Reduction Act are only the most recent evidence of a continuation of the miraculous increase in money. The French writer and diplomat Romain Gary anticipated it: “In the next deluge, God will not use water, but paper. “
The geopolitical tensions have not been resolved, but are less dramatic than BlackRock claims. The Russian military offensive is stuck. China distances itself from its Moscow partner. The West reacts as one and will not allow Ukraine to lose this war.
So, what’s the rationale behind BlackRock’s bleak negative guidance? Answer: The asset manager’s business model.
The premature upturn on the stock markets and a recession that is too mild are costing BlackRock a lot of money. Because the strategists have built up high cash positions. “We remain tactically underweight developed market equities,” states BlackRock’s Investment Playbook 2023.
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BlackRock shares this underweight in equities with around 326 fund managers, who have total assets under management of $1 trillion, recently surveyed by Bank of America. They all hold the most cash since April 2001.
This means: Wall Street is waiting for even cheaper courses. One speculates on a bear market. Nothing can BlackRock
Conclusion: “The secret of successful stock market trading lies in recognizing what the average person thinks the average person is doing,” John Maynard Keynes once said. The great economist underestimated the sophistication of today’s wealth managers. They want to influence the average citizen before they see through him. Because that makes it so much easier to look through.
Gabor Steingart is one of the best-known journalists in the country. He publishes the newsletter The Pioneer Briefing. The podcast of the same name is Germany’s leading daily podcast for politics and business. Since May 2020, Steingart has been working with his editorial staff on the ship “The Pioneer One”. Before founding Media Pioneer, Steingart was, among other things, Chairman of the Management Board of the Handelsblatt Media Group. You can subscribe to his free newsletter here.
